This year’s performance audits

Addressing issues of public concern

ICT in schools for teaching and learning

This audit assessed how well NSW public schools are using information and communications technologies (ICT) to improve teaching and learning.

In making this assessment, we examined:

  • department and school level planning for ICT
  • teacher use of ICT in the classroom
  • student learning with ICT.

Some specific findings included:

  • old equipment and wireless networks are not keeping pace with modern demands
  • the central funding model for ICT in schools is not meeting current needs
  • many teachers are not provided with devices for use outside of the classroom
  • there is limited teacher professional learning in the use of ICT.

Greater monitoring and reporting on technology use in schools is required. We made seven recommendations to the Department of Education to:

  • review whether resources allocated to ICT are adequate for modern school requirements
  • develop a program to improve wireless networks in all NSW schools
  • target assistance to schools requiring support with forward planning for ICT
  • improve the evidence base on ICT in schools to inform future plans and strategies
  • improve teacher access to devices for use outside of the classroom
  • improve teacher professional learning in ICT through more online learning opportunities
  • provide teaching resources to help develop student ICT skills and monitor their achievement.

The Department of Education accepted the report’s recommendations.

Office of Strategic Lands

This audit assessed whether the Office of Strategic Lands (OSL) effectively fulfils its role, and whether it is sustainable over the long-term. We asked the two following questions:

  • Does OSL fulfil its role to identify, acquire, manage and dispose of land?
  • Does OSL ensure it is sustainable over the long-term, to meet its objectives?

Overall, we found that OSL effectively fulfils most aspects of its defined role, but is not supporting strategic land planning through proactive identification and acquisition of land for future public use.

OSL is diligent in its financial management over the short and medium terms. However, it has identified that relying on the sale of surplus land to continue funding its ongoing operations is not sustainable, and it is yet to finalise a strategy to address this.

We made three recommendations to OSL to:

  • clarify and document its long-term purpose, role and goals in line with its mandate
  • develop and implement an approach for working with NSW government agencies to improve its efficacy in strategic land identification, acquisition and management
  • improve the transparency of its operations, and its communication and engagement with all stakeholders. This includes developing engagement strategies appropriate for different stakeholder groups.

The Department of Planning and Environment (Office of Strategic Lands) accepted the report’s recommendations.

Planning and evaluating palliative care services in NSW

This audit assessed whether NSW Health is effectively planning and evaluating palliative care services in the context of rising demand, increasingly complex needs, and the diversity of service providers. We asked the three following questions:

  • Does NSW Health collect and use data to inform the planning of high quality, safe and appropriate palliative care services?
  • Is service planning and delivery informed by evaluation and data?
  • Does NSW Health work in collaboration with other stakeholders in evaluating and planning palliative care services in New South Wales?

Overall, we found that NSW Health’s approach to planning and evaluating palliative care is not effectively coordinated. There is no overall policy framework for palliative and end-of-life care, nor is there comprehensive monitoring and reporting on services and outcomes.

We made four recommendations to NSW Health to:

  • develop an integrated palliative and end-of-life care policy framework
  • assess how outcomes data can be collected across all palliative care services in New South Wales
  • complete its state-wide review of systems and reporting and develop a business case to implement a more integrated set of solutions
  • develop a state-wide stakeholder engagement strategy.

NSW Health accepted all recommendations.

Energy rebates for low income households

This audit aimed to assess whether the current design and distribution of energy rebates schemes is effective. The audit did not seek to comment on the value of individual rebates or whether rebates are the best way to provide assistance to households.

Overall, we found that funds are directed to energy bills as intended. Ongoing support schemes have no measurable objectives or outcome measures and therefore cannot be assessed for their effectiveness. Crisis support, provided by the Energy Accounts Payment Assistance (EAPA) scheme, has a clear objective – to keep households experiencing financial crisis connected to energy services – but the Department of Planning and Environment does not monitor the performance of EAPA against this objective.

The structure of rebates providing ongoing support is complex and can be inequitable for some households. Stronger oversight is also required over partner organisations. We made specific recommendations around ensuring effective strategies, evaluation of alternative models, and assurance of equity of access.

The Department of Planning and Environment’s responses were not specific, nor did the department commit to specific actions.

Sharing school and community facilities

This audit assessed how effectively schools share facilities with other schools, local councils and community groups. In making this assessment, we examined whether the Department of Education:

  • has a clear policy to encourage and support facilities sharing
  • is implementing evidence-based strategies and procedures for facilities sharing
  • can show it is realising an increasing proportion of sharing opportunities.

Overall, we found that the sharing of school facilities with the community is not fully effective.

We made four recommendations to the Department of Education to:

  • increase incentives and reduce impediments for school principals to share school facilities
  • provide readily-accessible information about available school facilities to community groups and local councils
  • ensure that the implementation of the new ‘Joint Use of School Facilities and Land Policy’ is adequately resourced, and has the support of principals
  • implement processes to monitor and regularly evaluate the implementation of shared use and joint use policies and promote better practice to drive improvements.

The Department of Education accepted the report’s recommendations.

Government advertising campaigns for 2015–16 and 2016–17

The Government Advertising Act 2011 requires the Auditor-General to conduct an annual performance audit to check NSW government compliance with the Act. This audit examined two campaigns:

  • the ‘Stronger Councils, Stronger Communities’ advertising campaign run by the Office of Local Government and the Department of Premier and Cabinet during 2015–16
  • the ‘Dogs Deserve Better’ campaign run by the Department of Justice during 2016–17.

Overall, both government advertising campaigns complied with the Government Advertising Act and most elements of the Government Advertising Guidelines.

However, some advertisements were designed to build support for government policy and used subjective or emotive messages. This is inconsistent with the requirement in the Government Advertising Guidelines for ‘objective presentation in a fair and accessible manner’.

The perceived urgency to advertise impacted how the agencies engaged creative suppliers and the notice given to book placement of advertisements in the media. Due to this approach, it is hard for the agencies to demonstrate that value for money was achieved for both campaigns.

We made four recommendations to the Department of Premier and Cabinet around clarifying the meaning of ‘objective presentation in a fair and accessible manner’ as referenced in the NSW Government Advertising Guidelines, and processes around ‘urgent circumstance’ to advertise before completing the relevant compliance processes.

The Department of Premier and Cabinet accepted three of the report’s recommendations and accepted the fourth in principle.

Managing demand for ambulance services

This audit aimed to assess the extent to which NSW Ambulance’s demand management initiatives have improved the efficiency of its services.

Overall, we found that NSW Ambulance does not have an overall strategy for its demand management initiatives and its data systems do not measure their outputs or outcomes. As a result we were unable to assess the impact of NSW Ambulance’s demand management initiatives on the efficiency of ambulance services.

We recommended that NSW Ambulance develop a demand management strategy.

This strategy should outline its approach to managing demand. It should also determine the data system improvements required to provide accurate oversight of demand management initiatives that enable routine monitoring and reporting of activity and performance.

The strategy should also guide the continued use of Extended Care Paramedics, evaluate the approach to using telephone referrals for managing less urgent demand for services, and ensure paramedics are as well prepared as possible for their contemporary role.

The Ministry of Health accepted all recommendations.

Council reporting on service delivery

This was the Auditor-General’s first local government performance audit. For this inaugural audit in the local government sector, the Auditor-General chose to examine how well councils report to their constituents about the services they provide. The overall finding was that NSW local government councils could do more to report on how well they are delivering services to the public.

The report recommended the Office of Local Government, as the regulator of councils in New South Wales, issue additional guidance to councils on reporting on targets, outcomes, effectiveness and efficiency and performance over time.

The report also recommended the Office of Local Government consult with councils to develop a performance measurement framework. The report further advised that this framework should include associated performance indicators to support more transparent and informative reporting, target assistance to rural councils to help them improve their reporting, and work with NSW government agencies to help streamline and consolidate local government reporting requirements.

The Office of Local Government, as the regulator, accepted all of the report’s recommendations.

Detecting and responding to cyber security incidents

The audit focused on the role of the Department of Finance, Services and Innovation (DFSI), which oversees the Digital Information Security Policy. The audit also examined ten case study agencies to develop a perspective on how they detect and respond to incidents.

Overall the audit found that there is no whole-of-government capability to detect and respond effectively to cyber security incidents. There is very limited sharing of information on incidents amongst agencies, and some agencies have poor detection and response practices and procedures. There is a risk that incidents will go undetected longer than they should, and opportunities to contain and restrict the damage may be lost.

The audit made an extensive list of recommendations, including in summary:

  • to develop whole-of-government procedures, protocol and supporting systems to effectively share reported threats and respond to cyber security incidents
  • revise the Digital Information Security Policy and Event Reporting Protocol
  • develop a means for agencies to report incidents in a more effective manner
  • enhance NSW public sector threat intelligence gathering and sharing
  • direct agencies to include standard clauses in contracts requiring IT service providers to report all cyber security incidents within a reasonable timeframe
  • provide assurance that agencies have appropriate incident reporting procedures.

DFSI agreed with the general findings and recommendations outlined in the report. It also noted that the response strategy cannot be achieved without investment in cyber security, and so the findings and recommendations will be considered in the context of government funding priorities.

Managing risk in the NSW public sector: risk culture and capability

This audit assessed how effectively NSW government agencies are building risk management capabilities and embedding a sound risk culture throughout their organisations.

Overall the audit found that the agencies are taking steps to strengthen their risk culture. Senior management communicates the importance of managing risk to their staff. They have risk management policies and funded central functions to oversee risk management. We also found many examples of risk management being integrated into daily activities.

Agencies could do more to understand their existing risk culture. Our survey of risk culture found that agencies could strengthen a culture of open communication, so that all employees feel comfortable speaking openly about risks. To support innovation, senior management could also do better at communicating to their staff the levels of risk they are willing to accept.

NSW Treasury provides agencies with direction and guidance on risk management through policy and guidelines. However, there is scope for NSW Treasury to develop additional practical guidance and tools to support a better risk culture.

We recommended that NSW Treasury should review the scope of its risk management guidance, and identify additional guidance, training or activities to improve risk culture across the NSW public sector.

NSW Treasury supported the recommendation and committed to undertake action in this area.

Grants to non-government schools

This audit assessed how effectively and efficiently grants to non-government schools are allocated and managed.

Overall the audit found that the Department of Education effectively and efficiently allocates grants to non-government schools. Clarifying the objectives of grants, monitoring progress towards these objectives, and improving oversight, would strengthen accountability for the use of public funds by non-government schools.

The audit recommended the Department of Education establish and communicate funding conditions that require funded schools to adhere to conditions of funding, report their progress towards the objectives of the schemes, allow investigations to verify enrolment and expenditure of funds, and provide access to existing student level data to inform policy development and analysis.

The audit also recommended the NSW Education Standards Authority (NESA) extend its inspection practices to increase assessment of the proper governance of schools and establish formal information-sharing arrangements with the Department of Education. This will help them more effectively monitor schools’ continued compliance with registration requirements.

The Department of Education was accepting of the findings in the report.

NESA supported the findings of the report, but indicated that limited resources may impact on its ability to provide a greater focus on proper governance in non government schools.

Regional assistance programs

This audit assessed whether two regional assistance programs (Resources for Regions and Fixing Country Roads) were being effectively managed and achieved their objectives.

Infrastructure NSW effectively manages how grant applications are assessed and recommended for funding. Infrastructure NSW’s contract management processes are also effective. However, we are unable to conclude on whether program objectives are being achieved as Infrastructure NSW has not yet measured program benefits.

We made recommendations to:

  • improve probity reporting and record keeping practices
  • incorporate a benefits realisation framework as part of a project’s detailed application
  • strengthen some areas of program administration, such as by publishing the circumstances under which unspent funds can be allocated to extensions in project scope.

In considering the report recommendations, the three agencies clarified that Transport for NSW and the Department of Premier and Cabinet are responsible for program objectives, guidelines and measuring program benefits. Infrastructure NSW has committed to collaborate with these agencies to ensure that program benefits are measured and reported.

All of the recommendations were broadly accepted.

Report release date: 17 May 2018

HealthRoster benefits realisation

This audit assessed the effectiveness of the HealthRoster system in delivering business benefits. In making this assessment, we examined whether:

  • expected business benefits of HealthRoster were well-defined
  • HealthRoster is achieving business benefits where implemented.

The HealthRoster system is realising functional business benefits in the Local Health Districts (LHDs) where it has been implemented. In these LHDs, financial control of payroll expenditure and rostering compliance with employment award conditions has improved. However, these LHDs are not measuring the value of broader benefits such as better management of staff leave and overtime.

HealthRoster is taking six years longer, and costing $37.2 million more, to fully implement than originally planned. NSW Health attributes the increased cost and extended timeframe to the large scale and complexity of the full implementation of HealthRoster.

We recommended that NSW Health:

  • review the use of HealthRoster in the LHDs that implemented HealthRoster in the early stages to assist them to improve their HealthRoster related processes and practices.
  • ensure that LHDs undertake benefits realisation planning according to the NSW Health benefits realisation framework
  • regularly measure benefits realised, at state and local health district levels, by the state-wide implementation of HealthRoster
  • ensure that all LHDs are effectively using demand based rostering.

NSW Health accepted all of the report’s recommendations.

Shared services in local government

This audit assessed how efficiently and effectively councils engage in shared service arrangements.

Overall it was found that most councils we surveyed are not efficiently and effectively engaging in shared services.

The audit made one recommendation to the Office of Local Government to develop guidance which outlines the risks and opportunities of governance models that councils can use to share services. This should include advice on legal requirements, transparency in decisions, and accountability for effective use of public resources.

The audit also made four additional recommendations around practices for efficient and effective shared services. This includes building the capability of councillors and council staff in the areas of assessing and managing shared services, ensuring that the governance models they select to deliver shared services are fit for purpose, and ensuring clear roles, responsibilities, accountability and transparency of decisions.

The Office of Local Government accepted the recommendation and supported the recommended practices.

Fraud Controls in Local Councils

This audit provides a sector-wide snapshot of how local councils manage the risk of fraud. To understand this, we asked councils to complete a survey to assess their fraud controls against the ten fraud control attributes set out in our Fraud Control Improvement Kit.

Overall the audit found that most councils we surveyed have substantial room for improvement in their fraud control systems.

The audit made two recommendations and four observations for the Office of Local Government (OLG) to work with councils to ensure they comply with the Public Interest Disclosure Act 1994. The audit recommended OLG work with state entities and councils to develop commonality in how fraud complaints and incidences are defined and categorised. This will ensure they can better use data to provide a clearer picture of the level of fraud within councils and measure the effectiveness of, and drive improvement in, councils’ fraud controls systems.

The Office of Local Government accepted the recommendations and supported our observations.

Assessment of the use of a training program (special report)

On 15 March 2018, the Hon. Victor Dominello MP, Minister for Finance, Services and Property, requested the Auditor General conduct this audit. The audit assessed the effectiveness and economy of the Franklin Covey ‘7 Habits’ training program as used by the Department of Finance, Services and Innovation (DFSI) and Service NSW.

Overall, the audit found that both agencies negotiated value for money contracts for the delivery of the program when compared to other available options for training all staff. However, the agencies did not document evidence to show that training all staff members was necessary to meet their business needs, as compared with training fewer staff members at a lower overall cost. As a result, we were unable to form a view on whether the approach to train all staff members was economical.

The audit also found that the agencies are collecting the data they need to evaluate the program, and there is some evidence that the program is achieving its objectives in Service NSW. Due to the timing of the audit, there was not yet enough information available to comment on whether the program is achieving its objectives in DFSI.

The audit recommended that that DFSI improve the guidance provided to NSW government agencies engaging in direct procurement negotiations and that both agencies conduct post-completion reviews of their procurement processes. The audit also recommended that both agencies conduct an evaluation to inform a decision on whether implementation of the program should continue.

The agencies accepted the recommendations contained in the report.

Regulation of water pollution in drinking water catchments and illegal disposal of solid waste

The NSW Environment Protection Authority (EPA) is the state’s primary environmental regulator. The EPA regulates waste and water pollution under the Protection of the Environment Operations Act 1997 through its licensing, monitoring, regulation and enforcement activities.

This audit assessed the effectiveness of the EPA’s regulatory response to water pollution in drinking water catchments and illegal solid waste disposal. It found that there are important gaps in how the EPA implements its regulatory framework for water pollution in drinking water catchments and illegal solid waste disposal. This limits the effectiveness of its regulatory response. The EPA uses a risk-based regulatory framework that has elements consistent with the NSW government guidance for regulators to implement outcomes and risk-based regulation. However, the EPA did not demonstrate that it has established reliable practices to accurately and consistently detect the risk of non-compliance by licensees, and apply consistent regulatory actions. This may expose the risk of harm to the environment and human health.

The audit made seven recommendations on how the EPA can improve its governance and oversight, consistency in regulatory practices, compliance monitoring, and enforcement. The report also recommended the EPA, in collaboration with other agencies, address worsening water quality in Lake Burragorang – Sydney’s primary drinking water reservoir.

The EPA accepted all of the report’s recommendations.

Performance audit insights: key findings from 2014–2018 (special report)

In this special report, we presented an overview of common findings and themes from four years of performance audits. By highlighting commonly encountered issues, this report aimed to help agencies to learn from and respond to future challenges, and reduce the occurrence of repeat issues and findings arising from Auditor-General’s reports. This report has also helped us to determine areas of unaddressed risk across all parts of government, and will shape our future audit priorities.

We analysed the key findings and recommendations from 61 performance audits tabled in the NSW Parliament between July 2014 and June 2018, spanning varied areas of government activity. This analysis highlighted a need for continued overall improvement in key areas such as governance, assurance, transparency to the public, and measuring performance. The report findings are presented around six areas of government activity including planning for the future, meeting community expectations for key services, investment in infrastructure, managing natural resources, ensuring good governance, and digital disruption.